Google Chief: Facebook Not a Competitor

Google CEO Eric Schmidt dismisses the notion that his Internet company is on a collision course with Facebook, despite signs that Google is working on a social networking and gaming service of its own.

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Google CEO Eric Schmidt

“We’ve looked very carefully at this question” of whether Facebook is a competitor, said Schmidt, in a second installment of comments from an interview Monday that discussed whether Google is a “one-trick pony.”

First, Schmidt said, Google and Facebook don’t currently compete directly for ad dollars. Thus, to argue the two companies are adversaries is “mathematically false,” he said.

And Facebook is bringing more users online, which is good for Google. “Facebook users use more Google products than any other users,” he said. “You’re assuming that if they do well we do poorly,” he said, but “winners tend to all do well.”

Schmidt declined to comment on the idea that Google plans to enter Facebook’s turf with a social networking service that includes social games, as reported Wednesday by the Journal. But he also suggested that the battle for what some people call the social Web–and search engines for that matter–is far from over.

“Do you think the last search engine has been built?” he asked rhetorically. “Do you think the last social network service has been built? The rule of the Internet is it never stops.”

Schmidt also acknowledged that the two companies compete for talent. Over the past year several former Google executives who helped run the company’s advertising business joined Facebook.

Speculation is growing that Facebook could launch an advertising network across millions of other sites where the networking service is already integrated. That would put Facebook into competition with Google’s AdSense business, which serves ads to millions of sites.

Schmidt said he didn’t think the Googlers who defected to Facebook “would bring a copy of AdSense” to deploy under their new employer. He added: “They’ve done that; they should solve a different problem.”

The recent chatter about Google and Facebook reminded Schmidt of a period several years ago when Google and Yahoo were viewed as major rivals, in part because both had search engines and Web-based email services. The truth was that “users maxed out on both platforms,” he said, meaning the same users brought revenue to both companies.

Niren Hiro, a former Yahoo executive, remembers things differently. Hiro, who is now chief executive of CrowdStar, an social gaming company, said Yahoo’s hub of information used to be the first place that many Internet users visited.

With its powerful search engine, Google “took the Internet away from [Yahoo] and became the front door,” he said, while Yahoo has had trouble recovering. “The next front door might be Facebook.”